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In an almost unanimous decision, the United States Supreme Court issued an opinion yesterday allowing the former 17 year-old Abercrombie & Fitch applicant who attend her interview wearing a hijab to continue her religious discrimination claim against the company.

Samantha Elauf, the job-seeker and hijab-wearer, applied for a sales an Abercrombie & Fitch store in 2008. While she nailed the interview, Abercrombie refused to hire Elauf because she wore a hijab. According to Abercrombie & Fitch at the time, Elauf’s religious headscarf did not meet the “look policy,” which bans hats, required to work as a sales person at the company.

Elauf did not take this rejection letter sitting down. With the help of the U.S. Equal Employment Opportunity Commission, Elauf sued the retailer for religious discrimination. Title VII of the Civil Rights Act of 1964, among other matters, prohibits employers from refusing to hire an applicant because of that applicant’s religious beliefs. Title VII also requires employers to reasonably accommodate employees’ religious beliefs.

So what possible defense could Abercrombie offer at this point, keeping in mind that scantily dressed models do not provide a legal defense to religious discrimination?

Answer: knowledge. Or, more accurately, lack thereof.

Abercrombie argued that it could not have known to make a religious accommodation to its “look policy” because Elauf never requested one. Eight of the nine judges did not buy this argument, finding that the only relevant question was whether Elauf’s headscarf was a “motivating factor” in Abercrombie’s decision not to hire the applicant.

Writing for the majority, Justice Antonin Scalia stated that “[m]otive and knowledge are separate concepts.” Justice Scalia further wrote that “an employer who acts with the motive of avoiding accommodation may violate [the law] even if he has no more than an unsubstantiated suspicion that accommodation would be needed.”

Fellow member of the conservative group of the Supremes (a.k.a. the Supreme Court justices), Justice Samuel Alito posed a question during the February 2015 oral arguments that made Abercrombie’s “lack of knowledge” defense sound like a joke.

“So the first is a Sikh man wearing a turban. The second is a Hasidic man wearing a hat. The third is a Muslim woman wearing a niqab. The fourth is a Catholic nun in a habit. Now, do you think…that those people have to say, ‘We just want to tell you, we’re dressed this way for a religious reason. We’re not just trying to make a fashion statement’?” Justice Alito asked.

The bottom line for business owners is this: “the applicant did not ask for a religious accommodation” is not necessarily a defense to a religious discrimination case. The Supreme Court appears to be sending a message that, when it is obvious that an applicant may request a religious accommodation, the employer cannot refuse to hire an applicant because of that potential accommodation, then avoid liability because of a technicality.

The owners of three (3) closely held, for-profit corporations sued the federal Department of Health and Human Services (among other agencies).

The lawsuits claimed that the requirement under the Patent Protection and Affordable Care Act of 2010 (the “ACA”) that a corporation must provide employees access to contraceptives designed to prevent the development of an already fertilized egg violates the sincerely held religious belief of the owners (not of the corporation) that life begins at conception. Thus, the owners argued, this portion of the ACA violates their rights under the RFRA and the Free Exercise Clause.

Points to know:

The Decision Only Applies to Contraceptives that Prevent an Already Fertilized Egg from Further Development.

The ACA generally requires non-exempt employers to provide twenty (20) separate types of contraceptives approved by the federal Food and Drug Administration. Only four (4) of the twenty (20) contraceptives are designed to prevent an egg that has already been fertilized from attaching to the uterus wall and developing further (i.e., the “morning after pill” and IUDs).

The three (3) lawsuits only objected to those four (4) contraceptives designed to prevent a previously fertilized egg from further development.

The Hobby Lobby decision does not affect the remaining sixteen (16) contraceptives designed to prevent the fertilization of an egg. The Supreme Court’s decision thus does not prevent Hobby Lobby employees from access to those forms of contraceptives, nor does it release Hobby Lobby (and other qualifying corporations) from the responsibility to provide insurance coverage for those remaining sixteen (16) contraceptives.

The DecisionOnly Applies to For-Profit, Closely Held Corporations.

The Hobby Lobby decision does not exempt all employers from the contraceptive requirements of the ACA; rather, it only applies to closely held corporations. Generally, a “closely held corporation” is one owned by a small number of individuals. The Internal Revenue Service defines “closely held corporation” as a corporation where (i) five (5) or fewer people own more than fifty percent (50%) of the company’s outstanding stock at any time during the last half of the tax year, and (ii) the company is not a personal service corporation. Thus, the employees of publicly traded companies (like Coca-Cola) are not affected by the Hobby Lobby decision.

The Future of Hobby Lobby

The Supreme Court’s majority opinion in Hobby Lobby clearly limits the scope of its decision to closely held, for-profit corporations. Justice Ginsberg’s dissent, however, hints at a potential broader application of the Hobby Lobby decision by identifying other cases from courts across the nation where “commercial enterprises [have sought] exemptions from generally applicable laws on the basis of their religious beliefs.”

Justice Ginsberg questions whether this particular decision will also apply to other religious-based objections to the ACA’s requirements, such as blood transfusions, antidepressants, medications derived from pigs (such as anesthesia, intravenous fluids, or pills coated with gelatin), and vaccinations.

Of course, it is impossible to predict exactly how the Hobby Lobby decision will be applied by state legislatures and courts, or whether publicly traded companies will challenge the ACA under the same arguments as the three (3) closely held corporations. A savvy business owner, however, will remain cognizant of any new developments stemming from the Hobby Lobby decision or other objections to the ACA.

If you are ever in any doubt about how a state or federal law or recent court decision may impact your business, speak to a business attorney at Briskin, Cross & Sanford. Our business is to know.

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